TriStar Gold Inc (TSG.V) might very well be Brazil’s next goldmine.
On receiving their mining permits, the stock more than doubled reaching a high of $.24 in June 2024.
Both TriStar and government regulators have recently strongly defended the permitting process from a last-minute legal challenge. A recently closed financing at $.13 offers investors today a compelling entry point.
Friday, February 14, 2025
Happy Valentine's Day!
We'd like to quickly highlight an interesting opportunity in TriStar Gold Inc (TSG.V).
TSG's property, Castelo de Sonhos, is located in the mining friendly state of Para, Brazil. Its project would be a simple open pit operation dealing with oxides with a 98% recovery.
Significant Defined Resource
TSG has 280 million shares outstanding which gives it a market capitalization of approximately $36 million at $.13 CAD.
The company has 1,800,000 ounces of gold indicated at a grade of 1 gram per ton plus 700,000 ounces inferred at 0.9 g per ton.
This means you’re paying a ridiculously low price of $14.4 per ounce of gold in the ground for a fairly simple permitted project in Brazil with a very robust pre-feasibility study and low capex.
Robust PFS
TSG’s 2021 pre-feasibility study at $2000 shows an NPV (5%) of 811 million dollars with a very high IRR of 54%.
Average yearly production of 121,000 ounces over more than 10 years with AISC of only $900.
Initial capital expenditure is $261 million.
With these kinds of project economics, cost increases should not be an issue, especially when considering the massive appreciation of gold against Brazil’s local currency.
This has been confirmed by a recent study by Paradigm Capital. The Canadian broker recently estimated a cost increase of 47%, bringing AISC to $1321 with capex growing 40%, which shows a still very reasonable and financeable $365 million.
TriStar’s NPV calculation reaches $504 million using a gold price of only $2300. The IRR stays at a very healthy 36.2%. Its target price is 60 cents.
Bottom Line: Good Entry Point
Thus this appears to be a good entry point for an advanced gold project which is anticipated to become an economic mine.
The stock price is supported by a significant resource and robust PFS. A conservative NPV represents 14 times TSG’s market capitalization.
Tristar is confident that it will quickly overcome the last issues concerning its permits. In December 2024, it announced that it was evaluating financing options for drilling and a feasibility study, which will allow it to move towards a construction decision. If investors need to wait a year for these questions to resolve, any delays might be outweighed by positive price action.
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